bY Agence India Press
Srinagar: In a significant development, J&K Bank had adopted Seed capital fund scheme of government of Jammu and Kashmir to provide hassle free finance to the unemployed educated youth in the state. In this regard, the bank, in its board meeting held on August 30, 2010 has in principle agreed to act as a partner-financier to this newly formulated scheme launched by the state government under ‘Sher-e-Kashmir Employment and Welfare Programme for the youth (SKEWPY)’.
Speaking about the scheme, the acting Chairman J&K Bank Sudhanshu Pandey (IAS) said, “The Bank, as a matter of fact, has always been at the fore-front of all the initiatives that encourage entrepreneurship and seek to empower the people of the state.”
To encourage our educated and dynamic youth to take up entrepreneurship as a career wherein they can employ many others besides making personal fortunes, we are soon going to launch this scheme,” he added.
The scheme primarily aims to create a sound infra- structure for the entrepreneurship development through sensitization, training and consultancy in J&K state, which is beset with serious problems of both unemployment and under-employment.
However, it is for the first time that the state government has created ‘Entrepreneurship Development Fund (EDF)’ to address the issues of first generation entrepreneurs regarding ‘margin contribution’ and ‘higher risk perceptions in the ventures undertaken’.
To enable prospective entrepreneurs kick start their ventures/projects and make them bankable, J&K EDI will provide non-refundable Seed Capital/Money, equivalent to 35% of the project cost from the newly created EDF.
The loan component which has been restricted to 65% shall be provided by J&K Bank after requisite examination of the financial aspects of Detailed Project Reports (DPR).
Nevertheless, the EDI shall assist in formulating and implementing the state government’s policies for ‘Entrepreneurship Development and Skill Building programmes’.
Some of the distinguishing features of the scheme, as stated by Panday, are fast track project clearances, moratorium of 2 years and flexible repayment of loan in 5-8 years. One of the outstanding features of the scheme is that the borrower shall not be asked to provide collateral or any other tangible security like mortgage of immovable property. All these loans shall be covered under Credit Guarantee Fund Scheme (CGFS).